Elon Musk Gives California a Second Chance

To everyone’s surprise, Tesla’s CEO has decided to open Tesla’s engineering headquarters in Palo Alto, CA, just over a year after moving the automaker’s headquarters to Austin, Texas.

It’s a warming of relations between Elon Musk and California.

It’s a bit like the return of the child prodigy. 

At the end of 2021, the billionaire moved Tesla’s headquarters from Fremont, California to Austin, Texas. The reason was clear: the California authorities had given in to progressive ideologies, symbolized by wokeism, which was becoming a drag on business, according to the Techno king. 

Musk had not particularly appreciated the local lockdown measures in the state, which had severely disrupted production at the Fremont factory. On April 30, 2020, Musk launched a scathing criticism of anti-COVID-19 measures, during Tesla’s first-quarter-earnings call.

“I should say we are a bit worried about not being able to resume production in the Bay Area, and that should be identified as a serious risk,” Musk began.

Musk Was Unhappy 

“We only have two car factories right now, one in Shanghai and one in the Bay Area, and the Bay Area produces the vast majority of our cars, all of S and X, and most of the 3 and all of the Y.”

“So, the extension of the shelter-in-place or, frankly, I would call it, forcibly imprisoning people in their homes against all their constitutional alliance, that’s my opinion, and breaking people’s freedoms in ways that are horrible and wrong and not why people came to America or built this country.”

On May 11, 2020, a defiant Musk said in a tweet that “Tesla is restarting production today against Alameda County rules, I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.”

The Fremont plant is essential to Tesla. It produces all four models of Tesla passenger vehicles: the Model 3 and Model Y sedans and the Model Y and Model X SUVs. It is the only plant to produce all four models. It has an annual production capacity of 650,000 vehicles, Tesla said in its fourth quarter results.

The divorce was therefore inevitable between Tesla and California. On December 1, 2021, the automaker announced in a regulatory filing that its headquarters were now based in Austin, Texas.

“On December 1, 2021, Tesla, Inc. relocated its corporate headquarters to Gigafactory Texas at 13101 Harold Green Road, Austin, Texas 78725,” the firm wrote. The SEC filing was signed by Chief Financial Officer Zachary J. Kirkhorn.

Musk’s Twitter account was full of criticism of California.

Despite his other company SpaceX still being based in California, Musk has continued to criticize the state and its laws to employees. His criticisms grew harsher when he had to return to spend time in the state, after Twitter was acquired for $44 billion in late October. 

Twitter’s headquarters are based in San Francisco. 

California Back to Musk’s Good Graces

The San Francisco City Hall was investigating reports that the entrepreneur had beds set up at Twitter headquarters for employees he had asked to work long hours. The billionaire, who had laid off 5,200 of Twitter’s 7,500 employees, had decided to transform certain rooms into dystopian bedrooms.

His anti-San Francisco, anti-Californian sentiment had soared to the point where he had gone so far as to request the transfer of one of his lawsuits to Texas.

The judge refused. Against all odds, the jury ruled in favor of Musk, acquitting him in a trial that could have had colossal financial consequences. Musk was accused by investors of having lied, by claiming in the summer of 2018 to have enough funding to take Tesla private.

Since that verdict, Musk’s hard feelings toward California and the San Francisco area in particular seem to be dissipating. For example, he recently lamented the increase in empty offices in the city.

“Tragic. I hope SF comes back from this emptiness. It is such a beautiful city with so many amazing people,” the tech mogul grieved on Feb. 17.

California’s comeback in Musk’s heart is now more than a story of words. The billionaire has just announced that Tesla will establish its “global engineering headquarters” in Palo Alto, California, a sign of cooperation between the electric-vehicle maker and the EV-friendly state he once called home.

Tesla Bets on California … Again

“We’re excited to announce that Tesla’s global engineering headquarters will be right here, the former headquarters of Hewlett Packard,” Musk said alongside Democratic California Governor Gavin Newsom, in an event taking place in Palo Alto on Feb. 22, and streamed on Tesla’s Twitter account. 

In a dark suit and white shirt, the billionaire seemed visibly happy to make his announcement: “And this is, I think, a poetic transition from the company that founded Silicon Valley to Tesla. And we’re very excited to make this our global engineering headquarters in California.”

“Takes visionary leaders, it takes guts, takes courage, takes risks,” Newsom responded. “So I’m appreciative of you and appreciative of our partnership [in] the course [of the] last 20 years and let’s see this as the beginning of something even more extraordinary on the journey to dominate in this space and to change the way we produce and consume energy in this state and this nation and the world.”

“We’re looking forward to an exciting partnership with California to do exactly that, and transition the world to sustainable energy as quickly as possible,” Musk concluded.

The two men didn’t provide further details about the announcement: how many jobs will the move create or whether California was going to provide incentives.

Shortly after the announcement, Tesla immediately posted job offers on its site for engineers whose place of employment will be Palo Alto.

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